Date posted: 24/03/2020 2 min read

Helping clients with companies in financial distress

For accountants in public practice.

In Brief

  • ARITA with the support of Chartered Accountants ANZ and CPA Australia has published a special guide for accountants in public practice
  • Options available to your clients will depend on their solvency status
  • Be careful about who you turn to for specialised advice

The Australian Restructuring Insolvency and Turnaround Association (ARITA) with the support of Chartered Accountants ANZ and CPA Australia has published a guide for Accountants in Public Practice to assist in helping their clients with companies in financial distress.

The special guide highlights the importance of only dealing with a Registered Liquidator or a lawyer with additional law qualifications as nowadays there are many unscrupulous and unqualified 'pre-insolvency' advisors that utilise online platforms or even make direct contact that make them appear to be legitimate and trustworthy. It is often difficult to distinguish between unregulated, unqualified advisors and reputable, legitimate advisors.

The four page guide outlines indicators to look out for to determine when a company is insolvent, why determining insolvency is important and the options available for different company distress levels, 'safe harbour' laws that have been designed to help protect company directors that attempt to do the right thing and turn their company around lawfully, the different implications for SMEs & large businesses and the affects that financial distress can have on mental health.

To find a registered liquidator refer to the lookup tool on the ARITA website - https://www.arita.com.au/member

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